With a title like The Four Hour Workweek, author Timothy Ferriss has hit an interesting new point for a book. Essentially Tim combined time management with economics and a slash of small business sense and a pitch of retirement to create a very entertaining read.
First Tim shows us his currently lifestyle, he spends less than four hours a week running his business which uses about 200 to 200 people to run with very little input from him. Basically Tim is the owner, but not the manager of his own business. He delegates everything so that he can have the maximum amount of time to chase his own dreams.
Overall this is a hard book to summarize since there is so much different material that he covers, but I'll try to hit the high points for you. Tim is using the 80/20 rule, where 80% of your results come from 20% of your effort. First he applied it to his business and then every other part of his life. Basically he did a huge edit to his life of what was working and starting gutting the rest, he calls this lifestyle design.
For example, Tim suggests that we are all over consuming information. We swim in it everyday and it's eating our time up slowly but surely. He suggests that to really free up your time, you stop reading all that extra material you don't really need in a day. For example, Tim doesn't read a newspaper or online news. Why? It is really important someone will talk to him about so he can get the 20 second summary rather than lose 30 minutes to a news show.
Then Tim outsourced his own life to India and other locations to virtual assistants to ensure he is only working on the stuff that adds the most to his life. Everything else is outsourced from paying bills to booking a hotel room. All for the low price of $5 to $20/hour depending on where you hire your assistant and how skilled they are. Overall it isn't a bad idea. For example I could outsource my editing of this blog to someone else since I know I suck at it and make my reader's more happy.
One other item I particularly liked was the idea of the mini-retirement. If you can manage to outsource most of you life, then you can manage to stop dealing with it for a month fairly easily, this basically allows you then to move to a city of your choice worldwide for a month and rent an apartment for the same cost of a hotel for a week or two. If you can manage to give up or rent your current place during this time you end up actually living on less elsewhere than you would at home, so you end up saving money and having a great time.
Overall this was a fun book, I may not take everything Tim suggested to heart, but it did make me think a bit about my our life and where I want it to be going.
Have a good weekend,
CD
Showing posts with label Book Review. Show all posts
Showing posts with label Book Review. Show all posts
Friday, June 08, 2007
Wednesday, June 06, 2007
Book Review: Juggling Dynamite
In a sea of personal finance books it is nice to see something a bit different once in a while and I was nicely surprised when I was recently sent a copy of a new one called Juggling Dynamite by Danielle Park.
Danielle first breaks us of our concept of risk. She lays out how many of us are juggling dynamite and we don’t know it. We talk of risk tolerance, but unless you have lived through a major market down turn it is really hard to know how you will react. The plan seems good when the good times are rolling along, but the drop off is very painful and many people can’t follow through with the buy and hold method. Actually the drop off is typically so painful that she suggests a bit of different idea, we should time the market a bit.
Let me first put of the truce flag. She is not suggesting any as silly as day trading, but rather timing the market to the larger cycle that occurs approximately every five years. When the world is hitting record highs everyday and people are getting leveraged in to get even more gains, it is logically good idea to pull back to cash holdings and wait for the drop. Once the drop has occurred, you go in and pickup some of bargains. So how do we know when you hit the top or the bottom? You don’t. You just accept your choice and realize it is always better to sell a bit early and buy in a bit late. You make less, but you still make money. The trick of coarse is having a strong enough conviction to wait years in some cases for the market to drop back down.
To make our choices easier she suggests sticking to Exchange Traded Funds (EFT) and index funds to provide easy access to sectors and geography of the world markets without getting pulled into the game of picking individual stocks which is a losing game for most of us mortals.
Last but not least she provides a rare glimpse into the mind set of someone like myself who realizes true wealth is not your balance sheet, but rather the ability to have the freedom to do what is right for you regardless of what others think.
Overall the book was well written with some interesting insights into how investors think. I would suggest you pick up a copy if nothing else to see her interesting ideas on market timing. For more information check out her blog and the publisher's website.
Danielle first breaks us of our concept of risk. She lays out how many of us are juggling dynamite and we don’t know it. We talk of risk tolerance, but unless you have lived through a major market down turn it is really hard to know how you will react. The plan seems good when the good times are rolling along, but the drop off is very painful and many people can’t follow through with the buy and hold method. Actually the drop off is typically so painful that she suggests a bit of different idea, we should time the market a bit.
Let me first put of the truce flag. She is not suggesting any as silly as day trading, but rather timing the market to the larger cycle that occurs approximately every five years. When the world is hitting record highs everyday and people are getting leveraged in to get even more gains, it is logically good idea to pull back to cash holdings and wait for the drop. Once the drop has occurred, you go in and pickup some of bargains. So how do we know when you hit the top or the bottom? You don’t. You just accept your choice and realize it is always better to sell a bit early and buy in a bit late. You make less, but you still make money. The trick of coarse is having a strong enough conviction to wait years in some cases for the market to drop back down.
To make our choices easier she suggests sticking to Exchange Traded Funds (EFT) and index funds to provide easy access to sectors and geography of the world markets without getting pulled into the game of picking individual stocks which is a losing game for most of us mortals.
Last but not least she provides a rare glimpse into the mind set of someone like myself who realizes true wealth is not your balance sheet, but rather the ability to have the freedom to do what is right for you regardless of what others think.
Overall the book was well written with some interesting insights into how investors think. I would suggest you pick up a copy if nothing else to see her interesting ideas on market timing. For more information check out her blog and the publisher's website.
Friday, March 23, 2007
Book Review: Stop Working
I've had a copy of Derek Foster's Stop Working: Here's How You Can for a couple of years now, but I just realized the other day I have yet to do a book review on it. So here we go.
Derek took retirement to extremes and managed to get out the rat race at 34. His book was self published and cause a bit a stir in the investing world with some of his ideas. Basically he saved $200 a month plus any extra he had into an investment portfolio, with a couple of good trades and some great market timing he has assembled a portfolio which generates enough dividend cash for his family to live off in a typical middle class lifestyle.
Now there has been skeptics, saying how it that possible. Yet in the book Derek outlines he took a big risk and dumped his entire portfolio on one stock because in his analysis it was very undervalued. The result was he doubled his money. That took some serious conviction to do, so I have to give Derek a hand for that one.
The heart of Derek strategy is to buy a good dividend paying stock when it has suddenly dropped in price to get a great yield. Then he holds onto the stock forever to avoid capital gains and with Canada's wonderful treatment of dividend's for low income earners he pays no income tax. Overall I agree with this strategy for people who never leave the lowest income tax bracket. An RRSP is not going to be that much use to you, so you might as well cash in on the excellent tax treatment of dividend income.
So if nothing else the book is a good read for most people to learn about an alternative investing strategy that works very well for lower income earners.
For me personally it is not going to work out. My wife can use some of this strategy, but for me I do very well dumping the cash in an RRSP or spousal RRSP and taking the refund (I have a 8.5% tax spread between my current tax level and the amount I expect in retirement). Also I know I'm not a good stock picker, hence I stick most of my money into a Couch Potato Portfolio (25% Bond Index, 25% TSX Index, 25% S&P 500 Index, 25% International Index).
For more information on Derek's book check out the following:
-Canadian Capitalist book review
-Million Dollar Journey's book review
-Early Retirement forums at Canadian Business Online where Derek regularly posts
Derek took retirement to extremes and managed to get out the rat race at 34. His book was self published and cause a bit a stir in the investing world with some of his ideas. Basically he saved $200 a month plus any extra he had into an investment portfolio, with a couple of good trades and some great market timing he has assembled a portfolio which generates enough dividend cash for his family to live off in a typical middle class lifestyle.
Now there has been skeptics, saying how it that possible. Yet in the book Derek outlines he took a big risk and dumped his entire portfolio on one stock because in his analysis it was very undervalued. The result was he doubled his money. That took some serious conviction to do, so I have to give Derek a hand for that one.
The heart of Derek strategy is to buy a good dividend paying stock when it has suddenly dropped in price to get a great yield. Then he holds onto the stock forever to avoid capital gains and with Canada's wonderful treatment of dividend's for low income earners he pays no income tax. Overall I agree with this strategy for people who never leave the lowest income tax bracket. An RRSP is not going to be that much use to you, so you might as well cash in on the excellent tax treatment of dividend income.
So if nothing else the book is a good read for most people to learn about an alternative investing strategy that works very well for lower income earners.
For me personally it is not going to work out. My wife can use some of this strategy, but for me I do very well dumping the cash in an RRSP or spousal RRSP and taking the refund (I have a 8.5% tax spread between my current tax level and the amount I expect in retirement). Also I know I'm not a good stock picker, hence I stick most of my money into a Couch Potato Portfolio (25% Bond Index, 25% TSX Index, 25% S&P 500 Index, 25% International Index).
For more information on Derek's book check out the following:
-Canadian Capitalist book review
-Million Dollar Journey's book review
-Early Retirement forums at Canadian Business Online where Derek regularly posts
Monday, March 05, 2007
Book Review: Spend Smarter Save Bigger
I was recently sent a copy of Spend Smarter Save Bigger by Margot Bai which I just finished reading and I have to say it is the best general personal finance book I have ever read.
Overall Margot's book is just full of practical ideas that everyone can use and she explains everything in very basis terms that anyone could understand. She covers life insurance, buying a house, getting a mortgage, buying a car, car insurance, index investing, RRSP's and their role in retirement. She even manages to squeeze in a brief section on estimating your savings for retirement and RESP's.
I find most books tend to ignore certain things like the psychology of how people view their money. Margot uses her degree in psychology to really examine in some cases the our excuses around things and calmly cuts through our internal bullsh!t.
I also noticed in her recommended reading section a number of books that I have read and enjoyed as well such as Stop Working by Derek Foster and Stop Working...Start Living by Dianne Nahirny.
Perhaps my only complaint about the book is the retirement saving section could have been longer, but with all the other great material she covers I really can't fault her for keeping it short in the overall context of the book.
I would highly recommend to anyone that they go out and buy a copy of this book as it great addition to any home library for anyone who doesn't win a copy of the book from me. Yes that's right folks, I'm having a contest to win a copy of the book.
Win a copy of Spend Smarter, Save Bigger Contest. To enter please send me an email at candian.dream.free.at.45@gmail.com before March 7th, 2007 at 7pm CST (You must send me an email to enter, I won't accept just leaving a comment since I don't require email address on my comments). Limit one entry per person. Only open to residents of Canada. The winner will be picked from a random number generator. Your email address will only be used to obtain the winners mailing address.
For additional opinions of this book also check out Million Dollar Journey's Review and the Canadian Capitalist's Review.
Overall Margot's book is just full of practical ideas that everyone can use and she explains everything in very basis terms that anyone could understand. She covers life insurance, buying a house, getting a mortgage, buying a car, car insurance, index investing, RRSP's and their role in retirement. She even manages to squeeze in a brief section on estimating your savings for retirement and RESP's.
I find most books tend to ignore certain things like the psychology of how people view their money. Margot uses her degree in psychology to really examine in some cases the our excuses around things and calmly cuts through our internal bullsh!t.
I also noticed in her recommended reading section a number of books that I have read and enjoyed as well such as Stop Working by Derek Foster and Stop Working...Start Living by Dianne Nahirny.
Perhaps my only complaint about the book is the retirement saving section could have been longer, but with all the other great material she covers I really can't fault her for keeping it short in the overall context of the book.
I would highly recommend to anyone that they go out and buy a copy of this book as it great addition to any home library for anyone who doesn't win a copy of the book from me. Yes that's right folks, I'm having a contest to win a copy of the book.
Win a copy of Spend Smarter, Save Bigger Contest. To enter please send me an email at candian.dream.free.at.45@gmail.com before March 7th, 2007 at 7pm CST (You must send me an email to enter, I won't accept just leaving a comment since I don't require email address on my comments). Limit one entry per person. Only open to residents of Canada. The winner will be picked from a random number generator. Your email address will only be used to obtain the winners mailing address.
For additional opinions of this book also check out Million Dollar Journey's Review and the Canadian Capitalist's Review.
Monday, February 26, 2007
Book Review: How I Stopped Worrying About Retirement
During the weekend I finished reading How I Stopped Worrying About Retirement (without alcohol, nicotine, caffeine or other artificial stimulants) by Bruce McDougall which was an entertaining read. As you can tell by the title there is a fair amount of humour in the book which is a nice change from the typical personal finance book.
The other two thing that really sets this book apart from its peers. They are:
1) The entire book is told as a series of conversations between friends, similar to the Wealthy Barber. So it's easy to read as compared to the typically dry reading some personal finance books can be. Perhaps what is more amazing is there is a plot to the story rather than just a nice way to present information.
2) The author uses the characters to show different points of view and allows the reader to make up their own minds. Also the characters don't have perfect retirements. One had to cash in $50,000 of his RRSP's to cover the legal defense for his son's run in with the law, while another lost a pile of money with a junior mining company fraud.
As much as I enjoyed reading the book I'm left with a few problems with it. First the cast of character is large and you are dumped into a scene with all of them fairly shortly, so it's a bit confusing in the beginning to remember who is who (For example, is Richard or Cecil the penny pincher?). The second problem is the conversational style doesn't let the author touch on too many details for each topic so your left wanting more in some cases.
Yet despite the flaws, overall its a good read. It must be if my wife is thinking about reading it, since she almost never touches my personal finance books.
The other two thing that really sets this book apart from its peers. They are:
1) The entire book is told as a series of conversations between friends, similar to the Wealthy Barber. So it's easy to read as compared to the typically dry reading some personal finance books can be. Perhaps what is more amazing is there is a plot to the story rather than just a nice way to present information.
2) The author uses the characters to show different points of view and allows the reader to make up their own minds. Also the characters don't have perfect retirements. One had to cash in $50,000 of his RRSP's to cover the legal defense for his son's run in with the law, while another lost a pile of money with a junior mining company fraud.
As much as I enjoyed reading the book I'm left with a few problems with it. First the cast of character is large and you are dumped into a scene with all of them fairly shortly, so it's a bit confusing in the beginning to remember who is who (For example, is Richard or Cecil the penny pincher?). The second problem is the conversational style doesn't let the author touch on too many details for each topic so your left wanting more in some cases.
Yet despite the flaws, overall its a good read. It must be if my wife is thinking about reading it, since she almost never touches my personal finance books.
Monday, February 19, 2007
Book Review: Smoke and Mirrors
I recent sat down and read Smoke and Mirrors by David Trahair and I found myself a little disappointed. This little book is a mere 148 pages, so I was able to polish it off a few hours and it was not that great.
It 'exposes' five myths about retirement savings which include:
-The 70% of your current income is required in retirement
-RRSP's are the holy grail of retirement
-Don't worry about your investments, you be fine in the long run
-We have met the enemy and he is the tax collector
-Buy life insurance for financial security
Perhaps it's me reading too many personal finance books, but there were very few things of interest for me in this book. It's things we have all seen before and discussed in a much better detail in other books.
Yet there were a few things that I did like. First off he discusses the fact if you pay off your mortgage first prior to contributing to RRSP's you are buying yourself a little bit of disability insurance. If your completely debt free, you can live a lot less money and survive problems that would wipe out the average person's finances. Good point.
Also he includes a CD with some excel sheets which you might find useful, but I find he tends to go on a bit about using a computer to track your expenses. After all a note book will work if you don't want to get complicated.
So if you've read a lot of personal finance books you might want to pass on this one, but if your new to the game it could be a good short introduction.
PS: Thanks to Larry MacDonald for mentioning me in his blog last week. Also thanks to the Canadian Capitalist for featuring one of my book reviews in his latest This and That post. Also happy Family Day to all those who have it off today like me and my post Now You're In Trouble is part of the 88th Carnival of Personal Finance.
It 'exposes' five myths about retirement savings which include:
-The 70% of your current income is required in retirement
-RRSP's are the holy grail of retirement
-Don't worry about your investments, you be fine in the long run
-We have met the enemy and he is the tax collector
-Buy life insurance for financial security
Perhaps it's me reading too many personal finance books, but there were very few things of interest for me in this book. It's things we have all seen before and discussed in a much better detail in other books.
Yet there were a few things that I did like. First off he discusses the fact if you pay off your mortgage first prior to contributing to RRSP's you are buying yourself a little bit of disability insurance. If your completely debt free, you can live a lot less money and survive problems that would wipe out the average person's finances. Good point.
Also he includes a CD with some excel sheets which you might find useful, but I find he tends to go on a bit about using a computer to track your expenses. After all a note book will work if you don't want to get complicated.
So if you've read a lot of personal finance books you might want to pass on this one, but if your new to the game it could be a good short introduction.
PS: Thanks to Larry MacDonald for mentioning me in his blog last week. Also thanks to the Canadian Capitalist for featuring one of my book reviews in his latest This and That post. Also happy Family Day to all those who have it off today like me and my post Now You're In Trouble is part of the 88th Carnival of Personal Finance.
Tuesday, February 13, 2007
Book Review: The Naked Investor
I recently finished a book that chilled me to my bones with some of its stories. The Naked Investor by John Lawrence Reynolds has the subtitle 'Why Almost Everyone But You Gets Rich on Your RRSP.' It's a good description for the book.
The book starts with a near near miss by the author with a financial advisor whom could have wiped out half of his RRSP's savings with his proposed investment plan. The incident got the author thinking and it produced a scary look at the investment industry in Canada. The book tells several tales of advisers investing in completely inappropriate funds for clients to line their own pockets. The real scary part is when the clients try to get some money back when their instructions were ignored or out right fraud took place.
Often they never see a dime or they end up with a tiny portion of their money back and a gag order with the settlement agreement. But that's only for the investors who take the time to chase justice through a labyrinth of self regulated agencies and slow acting government regulators who make a sloth look like a sprinter. We are talking about a decade in some cases for a retired person to get any results.
I have to admit I always was a bit nervous around financial advisers for some reason I could never explain. This book has firmly changed the nervous feeling to out right paranoia about some things, but to be fair the author does point out there are some good financial advisers that are out there. They are just hard to find.
Perhaps the only draw back to this book is a lack of advice on what to do about the problem. The author repeatedly mentions the industry should go to a fee based structure rather than commissions, but offer no pratical advice on solving the issue. The only useful advice the author does provide is some general RRSP tips of buying index funds.
Overall I thought it was good read, but I would suggest you borrow a copy from your libaray rather than buying the book. The book lacks the content that would make it a useful reference.
The book starts with a near near miss by the author with a financial advisor whom could have wiped out half of his RRSP's savings with his proposed investment plan. The incident got the author thinking and it produced a scary look at the investment industry in Canada. The book tells several tales of advisers investing in completely inappropriate funds for clients to line their own pockets. The real scary part is when the clients try to get some money back when their instructions were ignored or out right fraud took place.
Often they never see a dime or they end up with a tiny portion of their money back and a gag order with the settlement agreement. But that's only for the investors who take the time to chase justice through a labyrinth of self regulated agencies and slow acting government regulators who make a sloth look like a sprinter. We are talking about a decade in some cases for a retired person to get any results.
I have to admit I always was a bit nervous around financial advisers for some reason I could never explain. This book has firmly changed the nervous feeling to out right paranoia about some things, but to be fair the author does point out there are some good financial advisers that are out there. They are just hard to find.
Perhaps the only draw back to this book is a lack of advice on what to do about the problem. The author repeatedly mentions the industry should go to a fee based structure rather than commissions, but offer no pratical advice on solving the issue. The only useful advice the author does provide is some general RRSP tips of buying index funds.
Overall I thought it was good read, but I would suggest you borrow a copy from your libaray rather than buying the book. The book lacks the content that would make it a useful reference.
Monday, February 05, 2007
Book Review: Your Money or Your Life
As I mentioned on Friday's post, I was reading a new book. The book was Your Money or Your Life by Joe Dominguez and Vicki Robin and I have to say this should be mandatory reading for anyone looking at early retirement or financial independence.
The authors start out with overhauling your ideas about money and all the emotions we have around it. They introduce the concept that money is exchanged for a part of your life energy (or the time you have on this earth). Then they get you to calculate your 'real' hourly wage by getting you to deduct your work related expenses from what you earn and then include the extra time it takes you to commute to work and unwind from work in your hours worked. This significantly drops your hourly wage and makes sure if your job is actually earning more than $4/hour.
The one concept they introduced that I really enjoyed was the Fulfillment Curve. This explained to me something I always knew, but could never really explain. It explains why people who buy every new gadget and toy are never happy. In a brief summary, you get your requirements for survival and have a small measure of fulfillment, but as you get past comfort items and into luxuries you hit a point of optimum fulfillment. If you keep buying stuff you actually start to have your fulfillment level go down. The trick to riding the curve is to know when you have enough and stop near the top, which they cover in another chapter.
A great section for anyone trying to reduce your cost of living is chapter 6 where they present 101 ideas on saving money, which I figure I'm already using over half of them.
I actually enjoyed almost the entire book. My only problem with the book was the last chapter where they suggest your entire early retirement nest egg should be in long term government bonds, which might be an option for someone living in the US (since they can be tax free), but a completely useless one for those living in Canada (since we get taxed at our marginal rate).
Overall I still felt it was a great read and suggest you find a copy from your local library.
The authors start out with overhauling your ideas about money and all the emotions we have around it. They introduce the concept that money is exchanged for a part of your life energy (or the time you have on this earth). Then they get you to calculate your 'real' hourly wage by getting you to deduct your work related expenses from what you earn and then include the extra time it takes you to commute to work and unwind from work in your hours worked. This significantly drops your hourly wage and makes sure if your job is actually earning more than $4/hour.
The one concept they introduced that I really enjoyed was the Fulfillment Curve. This explained to me something I always knew, but could never really explain. It explains why people who buy every new gadget and toy are never happy. In a brief summary, you get your requirements for survival and have a small measure of fulfillment, but as you get past comfort items and into luxuries you hit a point of optimum fulfillment. If you keep buying stuff you actually start to have your fulfillment level go down. The trick to riding the curve is to know when you have enough and stop near the top, which they cover in another chapter.
A great section for anyone trying to reduce your cost of living is chapter 6 where they present 101 ideas on saving money, which I figure I'm already using over half of them.
I actually enjoyed almost the entire book. My only problem with the book was the last chapter where they suggest your entire early retirement nest egg should be in long term government bonds, which might be an option for someone living in the US (since they can be tax free), but a completely useless one for those living in Canada (since we get taxed at our marginal rate).
Overall I still felt it was a great read and suggest you find a copy from your local library.
Wednesday, December 27, 2006
Book Review: How to Retire Happy, Wild and Free
As par of my vacation I'm getting caught up on some reading and I came across a great little book. How to Retire Happy, Wild and Free by Ernie J. Zelinski is a must read, but not for the usual reasons.
Typically I read books for investment advice, spending reductions and taxation. This one is different in the regards it focuses on that old question of "What are you going to do with all that time in retirement?" Ernie actually gives a great read on how to plan your leisure time to ensure you have a rewarding retirement.
It a pleasure to read a book that addresses the idea of how to have satisfying leisure time. I think most people spend far too much leisure time at passive activities such as watching TV. One example in the book is if you reduce your TV time by just one hour a day you will gain about 365 hours a year or about 20 extra days a year (based on a 18 hour day awake time) to do something more meaningful, such as reading or another hobby.
So next time you think you don't have time for anything. Try to just find one hour a day and see what happens. (Yes, I know that an hour can seem like an impossible goal some days, but try for just 15 minutes and you still gain an extra 5 days a year on something.)
Typically I read books for investment advice, spending reductions and taxation. This one is different in the regards it focuses on that old question of "What are you going to do with all that time in retirement?" Ernie actually gives a great read on how to plan your leisure time to ensure you have a rewarding retirement.
It a pleasure to read a book that addresses the idea of how to have satisfying leisure time. I think most people spend far too much leisure time at passive activities such as watching TV. One example in the book is if you reduce your TV time by just one hour a day you will gain about 365 hours a year or about 20 extra days a year (based on a 18 hour day awake time) to do something more meaningful, such as reading or another hobby.
So next time you think you don't have time for anything. Try to just find one hour a day and see what happens. (Yes, I know that an hour can seem like an impossible goal some days, but try for just 15 minutes and you still gain an extra 5 days a year on something.)
Friday, December 22, 2006
Holiday Posting & Book Review: The Millionaire Next Door
Well everyone I'm officially on vacation from 3pm today until Jan 3rd. I will not be posting on Christmas and Boxing Day, but I will try to post after that as often as possible. Happy Holidays and have a great long weekend.
* * *
I recent read the book, The Millionaire Next Door by: Thomas Stanley and William Danko, and I was a bit amazed by some of their findings. For example that fact that 80% of the millionaires in the US are first generation to their money was a bit of a wake up call. There are basically two types of a rich in the book: those that look rich (but actually have little assets) and those who don't look rich (but have tons of assets).
If nothing else this book teachings you not to worry about what others think and just do your own thing when it comes to money. Just because you earn enough to have the big house in the best neighbourhood and two cars, doesn't mean you have to spend it that way. I've always liked buying the worst house on the block in a decent neighbourhood and making sure I have a profit when I need/want to sell.
It also hammers home the idea that you are not what you drive. You have guys in the US who have a net worth of $10 million, but drive an old truck, because he likes to toss dead fish in the back seat after a trip to his best fishing spot.
So if your looking for some reading material over the holidays, I would suggest reading this book.
* * *
I recent read the book, The Millionaire Next Door by: Thomas Stanley and William Danko, and I was a bit amazed by some of their findings. For example that fact that 80% of the millionaires in the US are first generation to their money was a bit of a wake up call. There are basically two types of a rich in the book: those that look rich (but actually have little assets) and those who don't look rich (but have tons of assets).
If nothing else this book teachings you not to worry about what others think and just do your own thing when it comes to money. Just because you earn enough to have the big house in the best neighbourhood and two cars, doesn't mean you have to spend it that way. I've always liked buying the worst house on the block in a decent neighbourhood and making sure I have a profit when I need/want to sell.
It also hammers home the idea that you are not what you drive. You have guys in the US who have a net worth of $10 million, but drive an old truck, because he likes to toss dead fish in the back seat after a trip to his best fishing spot.
So if your looking for some reading material over the holidays, I would suggest reading this book.
Thursday, December 07, 2006
Book Review : Stop Working - Start Living
On my personal library shelf I have built up a small collection of some of my favorite retirement planning books. Out of all of these the one I like the best so far has been Stop Working - Start Living by Dianne Nahirny.
Dianne retired at age 36 and during her working life never made much of a salary (around $20,000/year), but she did make good money off a few house deals. She left the working world with a net worth of just $225,000. So the obvious question is with such a low net worth how is she financially independent? That is the lesson of the book: control your costs or they will control you.
Her book has two parts, the first part focuses on attitudes around money and how she came to her freedom day. More than anything what I was left with was the idea was to control your day to day spending and stop wasting money on things that don't mean anything to you (ie: your power bill). That way you feel fine spending money on those luxury items you really want. In Dianne's case, it was things like a antique gold locket, fur coat and a trip to Europe on the Concorde.
The second half of the book gets down to how to control your money. Some her examples are a bit extreme for my taste, but it proves the point. If your creative there is little no end in sight on ways to avoid costs and save money. The added bonus to her methods is you will be a kinder to the earth as you waste fewer resources. Which is exactly how I view it. I'm not saving the planet with low wattage light bulbs, I'm saving a few bucks and now have a $40/month power bill, so I'm taking that savings and building up to buy a new LCD TV.
Dianne retired at age 36 and during her working life never made much of a salary (around $20,000/year), but she did make good money off a few house deals. She left the working world with a net worth of just $225,000. So the obvious question is with such a low net worth how is she financially independent? That is the lesson of the book: control your costs or they will control you.
Her book has two parts, the first part focuses on attitudes around money and how she came to her freedom day. More than anything what I was left with was the idea was to control your day to day spending and stop wasting money on things that don't mean anything to you (ie: your power bill). That way you feel fine spending money on those luxury items you really want. In Dianne's case, it was things like a antique gold locket, fur coat and a trip to Europe on the Concorde.
The second half of the book gets down to how to control your money. Some her examples are a bit extreme for my taste, but it proves the point. If your creative there is little no end in sight on ways to avoid costs and save money. The added bonus to her methods is you will be a kinder to the earth as you waste fewer resources. Which is exactly how I view it. I'm not saving the planet with low wattage light bulbs, I'm saving a few bucks and now have a $40/month power bill, so I'm taking that savings and building up to buy a new LCD TV.
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